Lack of cooperative laws in place has made a lot of people to lost faith in cooperative societies. Their dream of quietly enjoying the economy of scale as a result of pulled resources, buying a land or owning a house or even venturing into great businesses is shattered due largely to mismanagement.
People are disillusioned and as a result, are missing out on great opportunities. That is why we have taken it upon ourselves at Realty Point Limited to not only educate you on the history, operations, laws and practices of cooperative societies, but to also provide an avenue through which you can enjoy the benefits of a well regulated, structured and managed one.
The fact is, in order to have an effective cooperative law, the members usually elect among themselves their management committee through democratic process.
The elected management committee is expected to provide the necessary leadership role for a cooperative society and that is what we have done with Prime Asset Housing Co-Operative Multi-Purpose Society Limited (www.primecooperative.org).
Please note that Realty Point Limited is not the owner of this Co-operative Society as nobody other than the members of a cooperative can or should own it.
It is a private venture initiative that is registered with the appropriate Government supervisory body and runs independent of the promoters.
It started as a tool to assist individuals in owning a home and though an initiative of Realty Point Limited, It has full complement of duly elected executives and operates on the principles and guidelines that govern cooperative law.
As I discovered when I started interacting with monitoring bodies, organisations, government and umbrella bodies, cases of fraud, mismanagement, negligence and other evils exist in a lot of cooperative societies.
But usually, the story starts from deviation of the dictates of cooperative law by way of waivers or outright disregard.
This I believe can be nib in the bud if members know some of the fundamental regulations guiding a cooperative and can place a demand on their management committees or individual executives to comply as soon as the first sign of deviance is showing up.
Some of the regulations that guide the operations of cooperative societies and protect you from unnecessary losses on your investments as stated by The Lagos State Cooperative Law which is the regulatory body for cooperative societies in Lagos State include:
Regulation 9 which deals with functions of the Annual General Meeting and makes it compulsory for all registered cooperative societies to hold this meeting once a year.
It must however be noted that no valid AGM can be held without an Annual Statement of Accounts duly approved by the Director of Cooperative Services.
Regulation 10 makes it obligatory for an officer of a society to seek re-election every year. An officer of a society shall not be appointed to his office for an indefinite period or for a period exceeding one year. A retiring officer shall, unless the byelaws otherwise provide, be eligible for re-election
Regulation 15 and 16 specify the duties of the Management Committee of a cooperative society which includes: strict adherence to the law and regulations made under the cooperative law, proper conducting of the business of the society, ability to maintain true and accurate accounts, aptitude to keep up-to-date record of the assets and liabilities of the society as well as a correct register of all members, presentation of the profit and loss account and balance sheet at the annual general meeting, providing assistance during the inspection of books by the person authorized to see them and also to take adequate security from members as well.
However, in a credit society, the committee must ensure that loans are utilized for approved purpose.
Regulations 17 and 18 make it compulsory for registered societies to keep such accounts and books as may be required or prescribed by the Director of cooperatives.
These accounts include: an account showing the income and expenditure for the year, profit and loss and balance sheet. The accounts must be made up to December 31st of every year and is submitted to the director of cooperatives
Another regulation put in place is the one that protects the Rights of members as provided in Section 37 (1) which states that each member of a registered society shall have one vote only in the affairs of the society. However, in the event that votes given for and against any proposal are equal in number, the President shall have a casting vote.
Section 37 (5) states that a registered society which is a member of any other registered society may appoint as proxy, for the purpose of voting in the affairs of such other registered society, any one of its members
Section 39 (1) states that on the death of a member, a registered society may transfer the share or interest of the deceased member to the person nominated
These regulations and much more create internal control systems for the conduct and practice of cooperatives and help ensure surplus (profit) or returns on investments made.